FEASIBILITY STUDY TEMPLATE

1. Executive Summary

The executive summary provides an overview of the content contained in the feasibility study
document. Many people write this section after the rest of the document is completed. This section is
important in that it provides a higher level summary of the detail contained within the rest of the
document. Remember to remove the green instructional portion of the Feasibility Study Template
before making your document final.

Alan’s Best Chocolates (ABC) is a leader in the sales of chocolates and confections throughout the United
States. ABC’s products are sold from 50 stores throughout the country and maintain a reputation for
superior taste and quality. While ABC’s sales have grown over the past 10 years, the rate of growth has
slowed significantly. One key factor for this slowing growth rate is the shift in the marketplace to
purchasing chocolates and confections online. While ABC maintains a web site, it is not capable of
hosting an e-commerce platform for online sales. ABC’s sales occur only in its brick and mortar facilities
and the company is losing potential customers to competitors who provide online sales. The chocolate
and confections marketplace is healthy and shows a continued growth trajectory over the next five to
ten years. ABC is in a position to capitalize on this online marketplace by leveraging existing
technologies, industry best practices, and an aggressive marketing and sales campaign to ramp up the
company’s growth projections for the foreseeable future.

2. Description of Products and Services

This section of the feasibility study provides a high level description of the products and/or services
which are being considered as past of the feasibility study. The purpose of this section is to provide
detailed descriptions of exactly what the organization is considering so this information can be applied
to the following sections of the document. It is important that this description captures the most
important aspects of the products and/or services that the organization is considering as well as how it
may benefit customers and the organization.

ABC is considering a move to create and provide an online platform from which to sell its existing
product line. Until now ABC has only sold its products from its chain of brick and mortar facilities and has
been limited to sales within the geographical regions where its stores reside. By doing so, ABC has not
been able to capitalize on the growing trend of online sales within the chocolate and confections
marketplace. By offering its products through an online platform, ABC can market its products to an
entirely new market, increase revenue and growth projections, and allow customers to purchase our
products from the convenience of their own homes.

There are no proposed changes to ABC’s current product offerings as a result of this study. Online sales
will include only current products and any changes to this product line must be considered outside of
the purpose of this document.

3. Technology Considerations

This section of the feasibility study should explain any considerations the organization must make with
regards to technology. Many new initiatives rely on technology to manage or monitor various business
functions. New technology may be developed internally or contracted through a service provider and
always result in costs which must be weighed in determining the path forward.

Upgraded technological capability will be required for ABC to move toward offering an online
marketplace from which customers may purchase our products. Customers demand a simple and easy
way by which to conduct online transactions and it is imperative that all transactions are conducted in a
secure manner. While ABC maintains a web site with product lists and descriptions, it does not currently
allow for purchasing to be done online. This functionality must be integrated with our current web site
to allow for secure purchases to be made. Additionally, new online marketing functionality must be
considered in order to target existing and potential customers through methods such as e-mailing lists,
promotional advertisements, and loyalty discounts.

While ABC maintains a small information technology (IT) group, the expertise does not currently exist
internally to design, build, and implement the sort of extensive online platform required for this effort.
Therefore, the recommendation is to contract this work out to an internet marketplace provider who
can work with ABC to meet its needs within the determined timeframe and budget. It should be noted
that while ABC does not have this expertise internally, the technology exists and is in use throughout the
marketplace which lowers the risk of this concept considerably.

ABC currently maintains a high speed internet connection, web server, and the latest software. With the
addition of an e-commerce portal it is expected that there will be an overall cost increase of 5-10% for
web server operations and maintenance costs.

4. Product/Service Marketplace

This part of the feasibility study describes the existing marketplace for the products and/or services the
organization is considering. It may describe who the target market consists of for these products or
services, who the competitors are, how products will be distributed, and why customers might choose
to buy our products/services. Most marketplaces are dynamic environments in which things change
constantly. To enter a new marketplace blindly will usually result in an organization not fully
understanding its role and not maximizing its resulting benefits.

The online marketplace for chocolates and confections has been thriving for many years. In FY20xx
online chocolate sales accounted for approximately $20 million or 20% of total chocolate sales
worldwide. While chocolates and confections are available in almost every store, our primary
marketplace consists of specialty chocolates and confections. All of ABC’s current major competitors
already have an established online presence of at least 3-5 years. The top 3 competitors are currently:
Smith’s Chocolates, Worldwide Candy, and Chocolate International. A large majority of ABC’s customer
base are returning customers and referrals from existing customers. By providing a more convenient
means of purchasing our products online it is expected that we will retain these customers while
conducting an online marketing campaign for new customers as well.

ABC will distribute online purchases via direct shipping from the nearest store location. This will allow
ABC to provide timely shipping and eliminate the need for a central warehouse or facility from which to
store and ship its products. Such a facility would require a significant capital investment as well as
increased operation and maintenance costs. However, based on anticipated growth projections, ABC
must ensure that all store locations maintain adequate inventories on hand to satisfy customer demand.
5. Marketing Strategy

Here the feasibility study provides a high level description of how the organization will market its
product or service. Some topics which should be included are: how does an organization differentiate
itself from its competitors; types of marketing the organization will utilize; and who the organization will
target. Marketing efforts must be focused on the right target groups in order to yield the greatest return
on investment.

In order to be successful, ABC must differentiate itself from competitors in order to appeal to customers
in the online marketplace. To do this, ABC will utilize its practice of personalizing its product packaging
which it currently offers in-store customers. Current competitors do not currently provide any
personalization of packaging. Customers will have the ability to personalize messages on or inside of
product packaging, request specific color-based themes, or tailor packaging for special occasions or
events.

ABC will implement a customer e mailing list in order to send product promotions, sales advertisements,
and other special offerings to customers who register. Additionally, ABC will offer referral incentives to
customers who refer our products to friends and family in order to provide additional incentives. ABC
will also maintain a customer database in order to determine its target customer groups and
geographical regions. ABC will research marketing intelligence providers to determine the benefits and
costs of purchasing customer information for bulk email campaigns as well. Another important
consideration of ABC’s online marketing strategy is cost. Electronic marketing communication costs are
very small in comparison to direct mail marketing which ABC currently utilizes. However, we expect the
additional revenue from online sales to greatly outweigh these additional electronic marketing costs.

It is important to note that ABC’s current marketing and sales staff will require training in online
marketing and sales practices. This training will need to be contracted to a training provider as part of
our startup costs and schedule.

6. Organization and Staffing

With many new products or services there may be a need for additional staffing or for an organization to
restructure in order to accommodate the change. These are important considerations as they may result
in increased costs or require an organization to change its practices and processes.

The ABC online sales campaign is not anticipated to significantly affect the organizational structure of
the company. There are, however, several staffing additions required to successfully implement the
online sales campaign. All of these positions will work within existing departments and report to
department managers.

Staffing Position #1: Online Sales Manager – this full time position will lead sales staff in identifying sales
opportunities and converting these opportunities to actual sales. This person will report to ABC’s
Director of Sales and will work in ABC headquarters.

Staffing Position #2: Online Marketing Manager – this full time position will lead marketing staff in
identifying target customer groups/markets and conducting online advertising/marketing efforts to
maximize traffic to ABCs online marketplace. This person will report to ABC’s Director of Marketing and
will work in ABC headquarters.
7. Schedule

This section of the feasibility study is intended to provide a high level framework for implementation of
the product or service being considered. This section is not intended to include a detailed schedule as
this would be developed during project planning should this initiative be approved. This section may
include some targeted milestones and timeframes for completion as a guideline only.

The ABC online sales campaign is expected to take six months from project approval to launch of the e-
commerce platform. Many of the foundations for this platform, such as high-speed internet and web
server capability, are already available. The following is a high level schedule of some significant
milestones for this initiative:

Jan 1, 20xx: Initiate Project

February 1, 20xx: Project kickoff meeting
March 1, 20xx: Complete online sales site design
April 1, 20xx: Complete testing of online sales site
June 1, 20xx: Complete beta testing trials of online sales site
July 2, 20xx: Go live with site launch

Upon approval of this project a detailed schedule will be created by the assigned project team to include
all tasks and deliverables.

8. Financial Projections

The financial projections for the feasibility study provides a description of the financial projections the
new initiative is expected to yield versus additional costs. Financial projections are one key aspect of
new project selection criteria. There are many ways to present these projections. Net present value
(NPV), cost-benefit calculations, and balance sheets are just some examples of how financial projections
may be illustrated. This section should also provide the assumptions on which the illustrated financial
projections are based.

The financial projections for the addition of an online sales platform for ABC are highlighted in the table
below. These figures account for projected online sales, additional staffing requirements, shipping,
material, and insurance costs, contract support for IT and training needs, and web server and hosting
costs.

The assumptions for these projections are as follows:

 In store sales projections remain unchanged

 All milestones are performed in accordance with the schedule

 All transactions are closed yearly with no carry-over to subsequent years

Measure Year 1 Year 2 Year 3 Year 4 Year 5 5 Year

Total

Online Sales Projections $350,00 $425,00 $500,00 $650,00 $800,00 $2,725,000

0 0 0 0 0
Additional Staffing Costs $160,00 $170,00 $200,00 $235,00 $255,00 $1,020,000
0 0 0 0 0

Projected Material, Shipping, $42,000 $58,000 $70,000 $78,000 $84,000 $332,000

Insurance Costs

Additional Web Server and IT $22,000 $25,000 $30,000 $35,000 $40,000 $152,000
Hosting/Maintenance

Training for Sales and Marketing Staff $75,000 $0 $0 $0 $0 $75,000

Contract for Design, Build and $100,00 $0 $0 $0 $0 $100,000

Implementation of Online Store 0

Total Additional Costs for Online Sales $399,00 $253,00 $300,00 $348,00 $379,00 $1,679,000
0 0 0 0 0

Cash Inflow -$49,000 $172,00 $200,00 $302,00 $421,00 $1,046,000

0 0 0 0

9. Findings and Recommendations

This section of the feasibility study template provides an area where to summarize the findings of the
feasibility study and explain why this course of action is or is not recommended. This section may
include a description of pros and cons for the initiative being considered. This section should be brief
since most of the detail is included elsewhere in the document. Additionally, it should capture the
likelihood of success for the business idea being studied.

Based on the information presented in this feasibility study, it is recommended that ABC approves the
online sales initiative and begins project initiation. The findings of this feasibility study show that this
initiative will be highly beneficial to the organization and has a high probability of success. Key findings
are as follows:

Technology:

 Will utilize existing technology which lowers project risk

 E commerce infrastructure will be contracted out to vendor which allows ABC to share risk

 Once in place this technology is simple to operate and maintain for a relatively low cost

Marketing:

 This initiative will allow ABC to reach large number of target groups electronically at a low cost

 ABC can expand customer base beyond geographic areas where stores are currently located

 The marketplace for online chocolate and confection sales is in a steady state of growth
  ABC is able to differentiate itself from its competitors and will utilize incentive programs to
target new consumers

Organizational:

 Minimal increases to staffing are required with no changes to organizational structure

 No new facilities or capital investments are required

Financial:

 Break even point occurs early in the second year of operation

 Five year projections show online sales accounting for 25% of total sales

 ABC will be in position to capture greater market share by maintaining both an in-store and
online presence